Turning the Page

by ted s. mcgregor jr. & r & & r & & lt;span class= "dropcap " & I & lt;/span & n his remarkable rebuttal to the Washington News Council's "Reporting on Yourself" report, former Spokesman-Review editor Chris Peck was right about one thing: "It's old news," he wrote of the latest rehash of the River Park Square scandal.

But when he added, "It's a dead horse," he was wrong.

As detailed by the report's author, Bill Richards, the River Park Square controversy traces its roots back to 1994. Somehow, here in 2007 the Spokesman-Review is still agonizing over it -- and, as you can see, we're still devoting ink to it. The fact that it has lingered this long is perhaps proof that an outside perspective was needed to help the newspaper -- and the community -- finally turn the page on this chapter of Spokane history.

Richards' report is no whitewash, as current Review editor Steve Smith predicted critics would charge. No, Richards, a veteran journalist, has methodically documented what most had already concluded: The Review should have covered the mall's funding plan more aggressively.

Normally, aggrieved citizens or businesses ask the Washington News Council to judge whether they were fairly treated by media coverage; in this case, the Spokesman-Review asked the WNC to check their own work, from 1994-2005 -- and they covered part of the WNC's fees related to the review. Richards was quick to point out the scope of his work -- just Review coverage -- so those eager for another trip through the financial maze that spawned so many lawsuits were likely disappointed.

Richards concludes that, "the publisher-editor relationship got in the way of the public interest in the reporting of a sequence of events of great importance to Spokane's citizens." In other words, as his report outlines, Chris Peck, perhaps out of some desire to please his bosses, failed to do his job. (Although Richards also finds the Review's huge 2004 series on the mall lacking, too, and that was done under Smith's leadership.)

Nowhere in the WNC report does Peck convincingly refute the notion that he should have done more (and he was interviewed by Richards). In fact, not only doesn't he disavow his labeling of former mayor John Talbott as a "civic terrorist," he even repeats the charge. If turning the page for Smith and the Cowles requires a scapegoat, Peck seemed perfectly willing to play the part.

But apparently Peck didn't like Richards' report, and he was given space to respond in Sunday's Review. He spent the early part of his comments taking swipes at Steve Smith -- no love lost there -- but he does finally offer a lukewarm caveat: "Of course the Spokesman-Review newsroom of the 1990s could have done more, or done better on River Park Square coverage." But then adds, "Frankly, other issues were bigger..."

Except that Betsy Cowles was out telling people the new mall was going to be the biggest thing to happen to Spokane since Expo '74. (And, many downtown developers argue, it has been, as it has triggered other developments, like condos and even the Davenport Hotel.)

In his own comments about the report, Smith apologized to readers and, oddly enough, to the Cowles family. "At the height of the RPS debate, this paper's editors could have made different decisions," Smith wrote. "Had we done so, citizens would have been better informed. And the Cowles family might have faced less criticism that they were using their media interests to further their personal agenda."

Smith went on to outline how the newspaper would adopt the five recommendations offered by Richards. Whenever Cowles business interests get in the news, the Review will now seek an outsider to do the reporting. And Smith himself will drop out of the editorial board to eliminate the appearance that he might influence the paper's official opinions in favor of the owners. The Review refused, however, to drop Duane Swinton as their First Amendment lawyer, as Richards suggested. A final recommendation, for the Cowles to separate their news assets from their business assets is a question for the owners.

To get more perspective on "Reporting on Yourself," I asked four people who have been involved in the River Park Square saga to share their thoughts. Here are their complete statements.

Tim Connor

Independent journalist who has won national awards for his reporting on the controversy

"They were civic terrorists," Chris Peck still insists.

If anyone needed a fresh reminder of how far the Spokesman-Review ran off the rails of journalistic ethics in promoting the Cowles family's River Park Square (RPS) project you can find this new quote from the former S-R editor on page 9 of the Washington News Council's analysis of the S-R's coverage of River Park Square.

Peck's statement to WNC investigator Bill Richards is a reprise of baseless charges Peck made in columns in 1998. It is directed at former Mayor John Talbott and those who supported Talbott when the rebel mayor opposed a $22.65 million federal loan for RPS. What makes Peck's renewed smear all the more astonishing is that we now know just how right Talbott was. Talbott feared the RPS loan would put millions of federal grants funds for poor Spokane neighborhoods at risk. His warnings came true. In the financial collapse of the RPS deal, Spokane lost at least $1.5 million in grant funds and was facing the loss of several millions more before the city suddenly settled its lawsuit against the Cowles family in late 2004.

In an open letter in 2002, I insisted the newspaper owed Talbott an apology for Peck's hatchet jobs. Five years later, in response to the WNC report, editor Steve Smith has responded by apologizing to his readers and to the Cowles family. But it's conspicuous that the paper still won't apologize to Talbott.

The News Council's report is an impressive but carefully muted piece of work. It certainly fills in some of the key factual details about how, for example, the paper "suppressed" information that was "potentially unfavorable" to the Cowleses. And yet, the report's oddly mumbled verdicts give the newspaper and its owners undeserved benefits of doubts where doubt has been obliterated.

The best example of that is on the key issue of Betsy Cowles's editing of a key news story in 1996 to try to hide the extent of the huge overpayment for the River Park Square garage.

Even after Camas Magazine published my 2003 story about an October 22, 1996 fax conveying handwritten edits from Cowles's office to the S-R newsroom, Smith told the Inlander that the S-R had found no evidence that the Cowles family edited RPS stories. Cowles refused to answer my questions about the fax, and so did the reporter who wrote the edited story. But Richards has gotten Cowles to admit that it is indeed her editing on the fax. He's also reported, as I did, that the news story was significantly altered, prior to publication, in response to the editing. This contradicts Cowles's deposition in the RPS security fraud case and begs the rather important question of whether she committed perjury.

Cowles's admission to Richards should have been enough to settle the issue. Instead, the WNC report muddles a key finding--"the final editing of the story was influenced by Betsy Cowles"--by using an obfuscating verb and then using a quote from Peck defending the Cowleses to end the discussion of the issue.

It's an improperly clouded interpretation of such central evidence. The use of the word "influenced" instead of simply reporting that Cowles edited the story bows to Cowles's insistence that the news desk could have rejected her meddling, even though it didn't. And this unjustified deference to Cowles's spin offers just enough room for Smith to spin it further. Well, there you have it, Smith writes, "there are no smoking guns proving direct intervention in any RPS story by Stacey or Betsy."

And it gets worse. In his May 6th column introducing the News Council report, Smith also locates an important distinction between "direct" and "indirect" intervention in news stories by the Cowleses. He then writes that he believes the report "confirms" that any Cowles influence was merely "indirect."

It's a shameless escape route, but the only one available to him. Smith's "belief" about what the report shows conflicts with the evidence presented in the report. But it's worth a try because, after all, Bill Richards and the News Council aren't coming back to clean this one up. Now it's up to Smith and the Cowleses to make sure we understand it correctly.

To appreciate the phoniness of Smith's response and how the paper still can't come to grips with how badly it performed in the RPS years, you need only ask yourself how the Cowleses and the newspaper would have responded if their old nemesis Paul Sandifur, Jr., were substituted for Betsy Cowles. Imagine, say, that the S-R had documented that Sandifur personally edited a Metropolitan Mortgage securities offering to remove sensitive information. Now imagine that Sandifur were to have claimed that his editing didn't show "direct" evidence of securities fraud because a company bond lawyer had to sign off before the offering went public.

The Spokesman-Review columnists and editorial page would have ridiculed him, mercilessly, and insisted he be prosecuted for perjury and fraud. And then the paper would have applied for a prestigious journalism award.

Doug Floyd

The Spokesman-Review's editorial page editor

The Spokesman-Review's coverage of River Park Square and its parking garage became what disaster planners would call a 100-year flood. Newsroom dilemmas of that magnitude don't come along often. Instead of covering the controversy from the outside, the newspaper found itself caught in the eddies of business and politics, and as Attorney General Alberto Gonzales might say, mistakes were made. I don't know of anyone inside the Spokesman-Review newsroom who would disagree.

But although the torrent of criticism that has been leveled at the newspaper is largely valid, the Washington News Council's recently released audit report also reveals some journalistic performances that are noteworthy for their professionalism under challenging conditions.

Maybe I have a bias. Maybe I'm too close to the news organization involved. And maybe I'm just weary of all the smug, recycled criticism over practices that have been committed, conceded and corrected.

But while there's plenty of that in the audit report, I found something positive, too. Something that deserves to be highlighted, lest it be overlooked.

Naturally, the failings that the audit documented have captured the most attention. For example: the no-surprises rule that enabled Cowles family members an advance look at stories about their business affairs. More significant, I think, were the times when story proposals never reached the no-surprises stage because they were turned down at the outset.

Depending on whose news judgment you accept, that was because they didn't merit pursuing or because ownership's interests were being anticipated and protected.

But in a situation where watchdog journalism called for aggressive investigation, revved-up reporters were shown too many yellow caution flags. That's the part most of us will focus on.

But don't miss these critical points:

1. If there were those atop the newsroom hierarchy who blocked certain stories from being written - or written in as much detail as was appropriate - that's because there were others who, without the benefit of hindsight, were applying rigorous pressure on behalf of those stories. People like reporters Jim Camden, Alison Boggs, Oliver Staley and Stephanie Craft. If they thought they were taking risks, it didn't slow them down.

2. And it didn't hurt their careers. Staley and Craft have moved on - on their own terms - but Camden and Boggs are still here along with the leadership, professionalism and example they set for the rest of us. Camden, the paper's senior political writer, is a respected and influential force in the newsroom and an invaluable mentor to younger reporters. Boggs' skill and professionalism were recognized even at the time she was arguing in vain for River Park Square stories that should have been written. This year she was named business editor.

Yes, the News Council's long-awaited, independent audit disclosed, again, the disappointments that have been acknowledged and discussed for the past five years or longer. But not everyone in the organization got it wrong. For those who are open to seeing it, there is also a display of integrity and drive by some genuine newsroom pros.

Steve Eugster

City councilman during the height of the River Park Square controversy who filed several lawsuits attempting to block the transaction

The history of River Park Square is a lesson in cowardice, incuriosity, a culture of corruption, and, most telling, a people more interested in "bread and circuses " than the welfare of a community. From the outset, the River Park Square fix was in. There was some shouting of wrongdoing, but only a few had the courage to fight, and even then almost all gave up.

The debates of right and wrong in judicial settings were the hope of those who knew the score. The problems of River Park Square went beyond the political. The problems could have been solved or prevented if the courts had had the courage to do what should have been under the Washington State Constitution and the rule of law. Looking back though, one has the impression the fights were lost at the outset. The judges of the courts at all levels did not have the courage to obey the law, obey the constitution and the city charter. Instead the judges changed the law, ignored the law, and where necessary because it would be to obvious to disobey the law, the judges ignored facts, misstated facts and rewrote the facts so desired results could be achieved. The decision of the Washington Supreme Court, which gutted the meaning of the Gift of Public Funds rule so the state could give millions, maybe billions to a baseball team, did not help.

In an important River Park Square Case, the case which held the City of Spokane had to loan money to the Spokane Parking Public Development Authority, the judges led by Chief Judge Stephen Brown "tricked the facts " with regarding to the lease. Eugster v. City of Spokane, 118 Wash.App. 383, 421 - 22, 76 P.3d 741 (2003). If the lease said loan money was to go to the payment of debt service on the Garage Bonds the court could not order the city to make the loan. This would have been a clear violation of the River Park Square Financing Ordinance (C-31823). The judges got around this problem by saying the lease had not been signed, when it fact it had. With the facts so tricked, the city loans were made and money went to pay the Garage Bonds.

This lease provision - loan money to the payment of Garage Bonds - was one of the greatest wrongs in the sad history of RPS. This is what happened in July and August, 1998. The developer could not get a bond rating company to rate the Garage Bonds "investment grade. " So in July of 1998 an amendment was made to the proposed garage lease which said that city loans to the garage would be used to pay the bonds. In the next two weeks and on the strength of that change Standard & amp; Poor's issued an investment grade rating and the bonds could be sold. The officers of the PDA signed the illegal lease on September 18, 1998.

These facts went unreported. They go unreported in the so-called "independent report. " They go unreported for what reason? The investigator knew of them. They are true. Everyone - city council members, judges, know of these facts. So why not report them. As I have said, the history of River Park Square is a lesson in cowardice, incuriosity and a culture of corruption.

But, the wealthy got their money, and the electorate got its "bread and circuses. " Under today's measure our leaders and our lumpen electors will conclude, must conclude, the disregard of virtue was worth the cost.

Lauri Siddoway

Special counsel to the city of Spokane in the federal lawsuits over the value of the bonds sold to fund the project

How well did the Washington News Council audit the Spokesman-Review's RPS coverage"? Not very well, considering what the newspaper should have reported from the RPS litigation.

As the City's attorney, I participated in scores of depositions and reviewed thousands of pages of documents. Many important facts came to light that have never been written about. An example is what we learned in 2003 about the poor condition of the parking garage, and how little had been spent on promised repairs and restoration of the old portion. Facts that we had uncovered and opinions of our engineer were a subject matter of motions in federal court and meetings of the City Council and the Parking Development Authority. But the condition of the garage received no serious attention from the Spokesman-Review until the tragic death of Jo Savage last year.

Another story that deserved attention was a legal right that the City and PDA enjoyed in 1999 to walk away from what was by then known to be a flawed transaction. The public should know, but doesn't, about the circumstances giving rise to this opportunity, and the extent to which the City's right to refuse the purchase was never squarely presented to its decision-makers. A third important story were the circumstances under which the bond underwriter and the City's bond counsel agreed that Pete Fortin - one of most honest and consistent questioners of garage projections - would provide a certificate that the underwriter would later contend was a City warranty of garage operations.

These and other stories were missed by a paper whose coverage appeared from my vantage point to be driven by developer press releases, the court calendar and the need to catch up on stories covered by other media.

But that is only the half of it. The Spokesman-Review also never challenged the withholding of thousands of documents from the public (mostly by Cowles' companies and their professionals) under claims of confidentiality. The newspaper had standing to challenge the withholding, and it fights for access to confidential information from others. It made no challenge here.

I will admit that the information generated by the litigation was voluminous and that monitoring it would have been time consuming and a significant investment. I will admit that no one else did the type of in-depth coverage I am suggesting should have been done by the Spokesman-Review. I will admit that the City could have made it easier for media by issuing press releases or directing the press to particular stories. I will admit that I'm suggesting the newspaper should have fought access issues against its owners and its affiliates even when other media were not pressing those claims.

But given its role as the town's only daily newspaper, and particularly where its "sins of commission" helped build support for the ill-fated garage financing, I believe the Spokesman-Review should have done these things. Too few people in this community understand, even today, what the RPS litigation was about or why the City has recovered millions of dollars in damages. Regrettably, the WNC's report does not touch on these matters at all.

Thu., March 5, 6:30 p.m.

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